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Singapore Employment Act 2013

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The Singapore government has a well-thought out and structured legislation in place in the form of the Singapore Employment Act (SEA), which is the main labor law of the country.

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Singapore Employment Act 2013

  2. 2. OVERVIEW As a regional business hub and an open economy, Singapore has an eclectic mix of human capital. The Singapore government has a well- thought out and structured legislation in place in the form of the Singapore Employment Act (SEA), which is the main labor law of the country. The SEA clearly spells out the basic terms and conditions of The Singapore government has a well- thought out and structured legislation employment and the rights and responsibilities of employers as well in place in the form of the Singapore as employees under a contract of service. Employment Act (SEA), which is the main labor law of the country . The SEA clearly spells out the basic terms The Singapore government also ensures that the Act, while in line with and conditions of employment and the rights and responsibilities of employers the international legislations, also provides adequate protection to all as well as employees under a contract vested parties in the process of employment. Developing a proactive of service. and harmonious labor, industrial and government relationship has remained the top priority of the legislation. The following overview of the Singapore Employment Act aims to provide a basic understanding of the legislation so that both prospective entrepreneurs and employees are aware of their rights and duties under a contract of service in Singapore.Last updated on 22 February 2013 Copyright © 2013 Rikvin Pte Ltd
  3. 3. BACKGROUND The relationship between employer and employee is determined largely by the contract of employment between them. Generally, under Singapore Law, parties are free to contract as they choose and any matters arising between them would have to be resolved by looking at either the expressed and/or implied terms of the contract in question. The relationship between employer and employee is determined largely by the contract of employment between However, legislations are in place to regulate the terms of contract them. to prevent unreasonable restrains and limitations on the parties involved. Common law and specific statutes govern the terms of contracts of employment. The principal statutes regulating employment in Singapore are contained in Employment Act. Other pertinent statutes shaping employment practices include the Workplace Safety and Health Act (“WSHA”), which came into effect on March 1, 2006; the Children Development Co-Savings Act (Cap 38A) (“CDCSA”); the Retirement Age Act (Cap 274A) (“RA”); the Trade Unions Act (Cap 333) and the Industrial Relations Act (Cap 136) (“IRA”). The Employment Act (Cap 91) (“EA”) was first passed in 1968 and was last amended on January 1, 2009. In May 2012, Singapore’s Ministry of Manpower announced a major review of the Act following the massive change in employment landscape that was fast departing from conventional practices in terms of time, payment, mode of work, type of people etc.Last updated on 22 February 2013 Copyright © 2013 Rikvin Pte Ltd
  4. 4. SCOPE OF COVERAGE Scope of Coverage The EA covers every workmen, (regardless of nationality) who is under a contract of service with an employer in Singapore. It does not make any distinction between a temporary employee, contract employee, daily-rated employee or employee on tenured employment. The term “workmen” includes manual laborers, drivers of commercial vehicles and certain other categories of workers. Exclusions & Partial Coverage The act does not apply to persons holding positions such as manager or executive, and also excludes seamen, domestic workers, government employees or employees of statutory boards. Junior managers and executives earning basic monthly salaries worth S$4,500 and below are only covered partially on the basic payment of salary. Professionals with tertiary education and specialized knowledge/ skills such as doctors and lawyers, and whose employment terms are comparable to those of managers and executives are not covered by SEA. Part IV of the Singapore Employment Act, which prescribes certain minimum requirements regarding rest days, hours of work, holidays, annual leave, sick leave, payment of retrenchment benefits, retirement benefits and certain other conditions of service, are applicable only to: • Workmen earning under S$4,500 in basic monthly salaries, and • Employees earning no more than S$2,000 in basic monthly salaries. It must be noted that the Employment of Part-Time Employees Regulation covers part-time employees who work for less than 35 hours a week.Last updated on 22 February 2013 Copyright © 2013 Rikvin Pte Ltd
  5. 5. THE EMPLOYMENT CONTRACT UNDERSTANDING CONTRACT OF SERVICE (COS) OR EMPLOYMENT CONTRACT What constitutes a Contract of Service Commonly referred to as Employment or Appointment Letter or Offer Letter, a Contract of Service (CoS) is usually a written agreement about the terms of employment/service between an employer and employee. Although there are oral Contracts of Service in modern practice, both parties prefer to have written agreement, where the terms are clearly set out to rule out ambiguity. An apprenticeship contract or agreement is also considered a CoS. Commonly referred to as Employment The SEA dictates the minimum standards for the terms and or Appointment letter or Offer Letter, a Contract of Service is usually a conditions of the employment contract and such terms must be written agreement about the terms equal to or more favorable than the conditions set out by the SEA. of employment/service between an employer and employee. Where the terms of a contract are less favorable than the provisions of the EA the provisions of the Act will take precedence over such less favorable contract terms. Key Clauses of Contract of Service A Contract of Service essentially contains the following key terms of service: • Job designation and scope of job; • Commencement date of work; • Details of salary and allowances, if any; • Hours of work per day/week/shifts; • Rate of overtime payment; • Rest days; • Employee’s benefits, e.g. annual leave, sick leave and hospitalization leave; • Termination of employment contract and notice period.Last updated on 22 February 2013 Copyright © 2013 Rikvin Pte Ltd
  6. 6. TERMINATION OF CONTRACT OF SERVICETypically, a CoS clearly lays out the terms of • An employee can use his annual leave duringtermination, relating to the manner of notice to be notice period if the employer approves such anserved, period of notice, termination benefits and in application for leave. In such cases, the employeethe case of executive-level positions, Non-Disclosure shall be paid for the full notice period.Agreements and restrictive covenants are also part ofthe termination clause. • An employer cannot force the employee to consume his annual leave during the notice periodThe provisions relating to the termination of if the employee does not wish to do so.employment contracts are set out in Part II of theSEA. Where the terms of termination are not expressly • Sick leave taken during the notice period shall formmentioned in the contract, the provisions of SEA will part of the notice period.govern. • Salary-in-lieu of notice shall not be subjected to CPFBoth contracting parties - an employer and an deductions and contributions, but salary earnedemployee - have the right to terminate a contract of during the notice period shall be subjected to CPFservice. Termination can be effected in one of the deductions and contributions as usual salary.following manners as the situation warrants: • Payment of all outstanding salary and any sumA. With Notice due, is to be made on the termination date or, if this is not possible, then within 3 days of it.A written notice is required and must comply with thenotice period agreed by the parties of the contract. B. Without NoticeThe notice period shall commence from the day whenthe notice is given. The notice period is same for both Both employer and employee may terminate a contractparties of the contract and on mutual consent, notice of service without giving a notice when a party of thecan be waived. contract breaches the contractual terms. In lieu of notice, the party who breaks the contract will have toIn the absence of a previously agreed period of notice, pay to the other party a sum equal to the salary thatthe parties shall comply by the following guidelines set the employee would have earned during the noticeout in the SEA. period. An employee may terminate a contract of employment Length of Service Notice Period without giving a notice to the employer, if:Less than 26 weeks 1 day26 weeks to less than 2 years 1 week • The employer fails to pay salary within seven days after salary is due; or2 years to less than 5 years 2 weeks5 years and above 4 weeks • If the employee is required to perform duties that are not within the terms of the contract of service.Key considerations An employer may terminate an employee without• Any unutilized annual leave can be encashed by giving notice , if: the employee. • The employee is absent from work continuously• Annual leave can be used to offset the notice for more than two working days, without approval period and to bring forward the last day of work. In or good reason or without informing or attempting such instances, the employer shall not pay for the to inform the employer of the reason for absence. annual leave thus used to offset the notice period and the employee shall be paid only until his last day of work.Last updated on 22 February 2013 Copyright © 2013 Rikvin Pte Ltd
  7. 7. TERMINATION OF CONTRACT OF SERVICE Note It must be noted that employers cannot change the terms of contract without the consent of the employee. Where there is no agreement, either party may choose to end the employment relationship by serving the appropriate notice to the other party. Failure to accept notice of resignations by employee is an offence and employers who are guilty shall be liable on conviction to a fine not exceeding S$5,000 or to imprisonment for a term not exceeding six months or to both. Termination of employment contract on grounds of Misconduct If an employee is found guilty of misconduct upon proper enquiry, an employer has the right to terminate the employee without notice. Breach of duty, expressed or implied, will constitute misconduct and acts of misconduct would also include dishonesty, theft, willful negligence, willful disobedience etc. Employers cannot change the terms of the contract without Employers must ensure proper enquiry is conducted on the allegations without the consent of the employee... any bias and the employee is provided with an opportunity to adequately present his case. Under the Employment Act, the employer may suspend the employee from work during an inquiry, for a period not exceeding one week. The employee should be paid not less than half his salary for the suspended period. If the inquiry does not disclose any misconduct on the part of the employee, the employer must restore to the employee the full amount of salary that was withheld. Appeals against unfair terminations must be made in writing, within one month of such dismissal, to the Ministry of Manpower. If the appeal is justified, the Minister may consider reinstating the employee in his former employment or ordering a sum of money as compensation, as the Ministry deems fit.Last updated on 22 February 2013 Copyright © 2013 Rikvin Pte Ltd
  8. 8. SALARY AND DEDUCTIONSPayment of SalaryPart II of the Employment Act (EA) contains the Deductions from Salaryregulations regarding salary payment. Employees inmanagerial and executive positions who earn basic The Act allows deductions from an employee’s salarymonthly salaries of S$4,500 and below are only for the following reasons only:covered partially by the EA on the basic payment ofsalary. The provisions regarding deductions are not • For absence from work.applicable to them. • For damage to or loss of goods or loss of fundsThe Employment Act requires that salaries be paid to entrusted to an employee, who is proven guiltyemployees within seven days, from the end of salary on due enquiry. (Deductions must not exceed 25%period. Failure to do so is considered an offence. of the employee’s one month’s salary, and such deductions may only be made on a once-off basis.)Salaries must be paid at least once every month.However, the employers are allowed to make salary • For cost of meals supplied by the employer at thepayments in shorter intervals. request of the employee.The Act does not provide any stipulations regarding • For house accommodation or for amenities andminimum wage/salary. The amount of salary and other services supplied by the employer and acceptedaccompanying allowances are to be mutually agreed by the employee.by the parties of the contract of service. • For the recovery of advances, loans or adjustmentSalary constitutes remuneration including allowances, of overpayments of salary. (To be made inif any, in exchange of the work performed according installments, not spreading beyond 12 monthsto the contractual agreements. However, the following and cannot exceed 25% of the salary due for thedoes not constitute a salary: period)• The value of accommodation or quarters, supply • For income tax payment. of light, water, medical attendance or other • For CPF contributions. amenities; • For contributions to superannuation scheme or• Pension or provident fund contribution paid by the provident fund or any other scheme at the request employer; of the employee in writing.• Travelling allowance; • For payments to any registered co-operative• Payments to defray special expenses incurred in society with the written consent of the employee. the course of duty; • For any other purpose which may be approved• Gratuity payable on discharge or retirement; or upon application from time to time by the Minister for Manpower• Retrenchment benefits (if provided). Note: Maximum deductable sum is 50% of the salary due for the salary period, not including deductions made for absence from work, recovery of loans/advances, income tax or for the purpose of payments to be made to registered societies at the consent of the employee. However, if the contract of service is terminated, then in order to recover all sums due from an employee, the deductions from his last salary may exceed 50%.Last updated on 22 February 2013 Copyright © 2013 Rikvin Pte Ltd
  9. 9. HOURS OF WORK, OVERTIME & REST DAYSProvisions regarding Hours of Work, Overtime & RestDays are contained in Part IV of the Employment Act.It must be noted that these provisions are applicableto Workmen, whose monthly salary is no more thanS$4,500, and other employees, whose basic monthlysalary is no more than S$2,000.The EA requires that every employee who is coveredby the Act must be informed of the daily workinghours, the number of working days in each week andthe weekly rest days.Normal Hours of WorkingNormal work hours for an employee, as provided by the Payment for OvertimeEA, is 8 hours a day or up to 44 hours a week. However,if an organization follows a five-day workweek, then Every employee who works beyond the normal workthe employee may have to put in more than the eight hours as provided under the EA must be paid forhours per day, yet are not required to work for more overtime work. The Act provides that such overtimethan nine hours per day or 44 hours in a week. pay must be at least 1.5 times the hourly rate of pay and such payment must be made within 14 days of theA shift worker is allowed to work up to 12 hours in last salary period. It is mandatory to make overtimea day, and average working hours per week cannot payment to an employee if his basic salary is S$2,000exceed 44 hours over a continuous three-week period. or less a month, or to a workman if his basic salary is S$4,500 or less a month.Maximum Hours of Working Rest DaysAn employee is allowed to work for a maximum of12 hours within a workday except under special Every employee is entitled to one whole day (midnightcircumstances. Employers, who require their to midnight) of rest day in a week. If Sundays are notemployees to work more than the maximum daily the rest days for an employee, then the employer mustworking hours, are required to apply for overtime provide a monthly roster informing the employee ofexemption from the Ministry of Manpower. Such his rest days for the month at the beginning of eachovertime for an employee cannot exceed more than 2 month.hours beyond the maximum working hours. The gap between two rest days cannot be more thanBreak Time 12 days and in the case of a shift worker, the rest day can be a continuous period of 30 hours.Employees are generally entitled to breaks betweenwork. In general, they cannot be made to work Rest days are not paid days and the employer cannotcontinuously for more than six consecutive hours, but force an employee to work on the rest day unless thereif the nature of work is such that it has to be performed is a special circumstance. In such cases, depending oncontinuously, then an employee may be required to whose behest the work was initiated and the numberwork eight hours continuously, but must be provided of hours worked, the employee must be paid rangingwith a break, of at least 45 minutes, for food and from half day’s salary up to two days salary.refreshments.Last updated on 22 February 2013 Copyright © 2013 Rikvin Pte Ltd
  10. 10. CENTRAL PROVIDENT FUND (CPF) Central Provident Fund (CPF) is a savings scheme, to uphold the financial security of Singaporeans and Permanent Residents. It is a comprehensive scheme addressing the needs of a person not only after retirement but also their home-ownership, medical requirements, asset enhancement and the protection of dependants. Employers are required to pay the employer’s and employee’s share of CPF contributions every month for all employees Employers are required to pay the employer’s and employee’s share (Singapore Citizens and Singapore Permanent Residents) at of CPF contributions monthly for all the rates set out in the CPF Act. The contributions payable Singapore Citizens and Singapore should be based on the employee’s actual wages earned Permanent Residents. for the month. Payment to the CPF board must be made within 14 days from the end of the month for which CPF contributions are due. The employer can deduct the employee’s share of the contribution from the salary at the time of payment of wages.Last updated on 22 February 2013 Copyright © 2013 Rikvin Pte Ltd
  11. 11. EMPLOYMENT OF CHILDREN & YOUNG PERSONS Part VIII of the Employment Act and The Employment of Children and Young Persons Regulations contains the provisions regarding employment of children. A child must be at least 13 years of age to be employed and must be engaged in suitable forms of work as defined by the Act. A child aged between 13 and 15 years of age cannot be engaged in any industrial undertaking or vessel unless it is A child must be at least 13 years of age under the personal charge of parents. to be employed and must be engaged in suitable forms of work as defined by the Act. Employers engaging Young persons, aged between 15 and 16 years of age, must inform the Commissioner of Labor within 30 days of such employment and submit a medical report certifying the young person’s fitness for employment. Persons below 16 years of age are not allowed to work in places with hazardous conditions or conditions that are injurious to health. They cannot be made to work in or near machineries in motion, or ineffectively insulated electrical equipments. They cannot be employed in underground work. Subject to the following conditions, children can be employed as workmen, that is, work involving physical labor. • They cannot work during the night. • For a child, the hours of work cannot exceed six hours in a day and a break of 30 minutes must be provided after three hours of work. • For a young person work cannot exceed seven hours in a day and a break of 30 minutes must be provided after four hours of work. • They are not allowed to work on their rest days without the permission of the Commissioner for Labor.Last updated on 22 February 2013 Copyright © 2013 Rikvin Pte Ltd
  12. 12. LEAVE AND HOLIDAYSAnnual LeaveEmployees covered under the EA are entitled to There is no expressed provision for marriage andannual leave according to their period of service with compassionate leave. It depends on terms of contractthe employer and the employee must have been or mutual agreement between employer andworking for the employer for at least three months to employee.be eligible for such entitlement. Where an employee isnot eligible for annual leave, the employer may grant Sick Leaveunpaid leave to the employee. Also, if an employee’sleave days have exceeded permitted number of annual Employees covered under the EA are allowed paid sickleave, then the employer is allowed to deduct from the leave provided:employee’s salary. • He has worked for the employer for at least threeAn employee who has completed one year of service, months;is entitled to 7 days of annual leave and thereafter 1 • Informs the employer or at least makes reasonablemore day for every additional year of service until the attempts to inform of his absence within 48 hours;eighth years of service and thereafter 14 days. Pleaserefer to the table below for annual leave entitlement • He is certified by an approved medical practitioner.under Part IV of the Singapore Employment Act. An employee, who has worked for more than six Year of service Days of leave months with an employer, is entitled to 14 days of paid One 7 outpatient sick leave and 60 days of paid hospitalization leave. New employees, who have worked for more Two 8 than three months, are entitled to 5 days of paid Three 9 outpatient leave and 15 days of paid hospitalization Four 10 leave. Such new employees get 3 days and 15 days of Five 11 paid outpatient and hospitalization leave respectively, for every additional month of service until they acquire Six 12 six months of service. Seven 13 Eight or more 14 Salary to employees on paid sick leave must be paid at his gross rate of pay. If an employee has worked for atWhere an employee has been in service for less than a least three months, his employer is legally obliged toyear, then the annual leave entitlement must be pro- bear the medical consultation fees. Reimbursement ofrated in proportion to the service period. other charges depends on the terms of contract or the collective agreement signed between the employerAnnual leave taken on a half working day such as a and the union.Saturday, will still be considered as one day of Annualleave. However, it is left to the employer’s discretion Public Holidayswhether to treat it as half-day leave. If less than full-day of leave is taken by an employee, if the fraction is All employees covered by the Employment Act arehalf or more, it will still be considered as one full day entitled to 11 paid public holidays in a year. Upon mutualof annual leave. agreement, the public holiday can be substituted for any other day. If the holiday falls on a rest day, the nextThe annual leave entitlement can be forfeited if the working day will be a paid holiday.employee is absent from work without permission orreasonable excuse for more than 20% of the working If an employee is required to work on a public holiday,days or if the employee is terminated on grounds of then the employer is required to pay an extra day’smisconduct. An employee’s annual leave entitlement salary at the basic rate of pay for working on the publicthat remains unutilized beyond 12 months will also be holiday, in addition to the gross rate of pay for thatforfeited. holiday.Last updated on 22 February 2013 Copyright © 2013 Rikvin Pte Ltd
  13. 13. MARRIAGE & PARENTHOODThe Singapore government is keen on fostering a Extended Protection During Maternity Periodpro-family environment and as part of its Marriage& Parenthood package 2013, several enhancements In order to prevent unfair dismissal and retrenchmentwere announced to the existing entitlements of of pregnant employees, an enhanced protectionparents and would-be parents. The following is a brief scheme has been announced. From 1 May 2013, if aoverview of the work life enhancing schemes that pregnant employee is retrenched or dismissed withoutwere announced, which will result in some changes to sufficient cause during any point of her pregnancy, thethe provisions in EA. employer will be required to pay her the maternity benefits. To qualify for such coverage during the entireShared Parental Leave & Paternity Leave pregnancy period, the employee must have worked for a minimum period of three months with the employer.From 1 May 2013, working fathers, including thosewho are self-employed, are entitled to share 1 week Currently the, law requires payment of such benefitsout of the 16 weeks’ maternity leave, subject to the for termination or retrenchment of an employeeagreement of the mother and provided that they meet within three months or six months respectively fromthe following criteria under CDCA : the date of estimated delivery or confinement.• The child is a Singapore Citizen born on or after 1 Maternity Benefit for Short-term Contract Workers May 2013; Working women, who currently do not qualify for• Mother qualifies for Government-Paid Maternity maternity leave, such as those on short-term contract Leave; work, can now benefit from the Government-Paid Maternity Benefit scheme which allows them to enjoy• Father is lawfully married to the child’s mother. Government-Paid Maternity Leave, in the form of a cash benefit which is capped at S$10,000.The shared parental leave is to be consumed as acontinuous block within 12 months of the birth of the It is equivalent to the government-paid portion ofchild. Upon mutual agreement with the employer, it maternity leave and calculated based on the mother’scan be taken flexibly within the first 12 months of the income in the 12 months before childbirth. Workingchild’s birth. mothers will be entitled to the new benefit as long as they have worked for a total of 90 days in the 12Working fathers, meeting the criteria below will be calendar months before giving birth. The child must beentitled to 1 week of Government-Paid Paternity Leave Singaporean and born on or after 1 January 2013.for all births.• Child is a Singapore Citizen born on or after 01 May 2013;• The child’s parents are lawfully married;• Father must have served his employer for a continuous duration of at least 3 calendar months immediately preceding the birth of the childSuch leave is to be taken within 16 weeks of the birth ofthe child and it can be flexibly taken within 12 monthsof the birth of the child if there is a mutual agreementbetween the employer and employee.The government funding for the paternity leave andshared parental leave for qualifying fathers is cappedat $2,500 including CPF contributions.Last updated on 22 February 2013 Copyright © 2013 Rikvin Pte Ltd
  14. 14. MARRIAGE & PARENTHOODExtended Child Care LeaveCurrently, parents are entitled to childcare leave of The following criteria must be met to qualify for6 days annually if their children are aged 7 years and adoption leave:below. In order to cater to the requirements of parentswith children slightly older kids, that is, primary school • The adopted child is below the age of 12 monthsgoing age, an extended childcare leave package has at the point of ‘formal intent to adopt’, i.e. Courtbeen introduced. Application to adopt (for local child) or issuance of in-principle approval for Dependant’s Pass (forFrom 1 May 2013, each parent will be entitled to 2 foreign child);days of Government-Paid Child Care Leave per parent,annually, if they have a Singapore Citizen child between • The adopted child is a Singapore Citizen;the ages of 7 and 12 years. • If the child is a foreigner, one of the adoptiveThe following criteria must be met in order to qualify parents must be a Singapore Citizen;• Child is between 7 and 12 years of age on or after • For a foreign child, the child must become a 1 May 2013; Singapore Citizen within 6 months of the child’s adoption.• Child is a Singapore Citizen; • The adoptive mother is lawfully married at the• Parent is lawfully married; point of ‘formal intent to adopt’;• Parent must have served his or her employer for a • The mother has served the employer for at least continuous duration of at least 3 calendar months; 3 calendar months, or was engaged in the trade, business, profession or vocation preceding theThe Government‘s funding is capped at S$500 per day point of ‘formal intent to adopt’;including CPF contributions. • The Adoption Order is passed within 1 year fromNote: Parents with children in both the age groups, the point of ‘formal intent to adopt’.that is, children aged under 7 years and children agedbetween 7 and 12 years are entitled to total of six days Qualifying mothers are entitled to consume the leaveleave annually per parent. from the date of Court Application to Adopt or from the date of issuance of In-Principal Approval of DependentAdoption Leave Pass for the child, as the case may be.Currently, in order to help mothers of adopted childto care and bond with the child, the Governmentreimburses up to 4 calendar weeks of Government-Paid Adoption Leave (subject to a cap of $10,000) toemployers who voluntarily grant adoption leave totheir employees.From May 1 2013, adoption leave has been madestatutory and employers are required by law to providethe same to qualifying mothers. Adoption leave isrequired to be consumed within the first birthday ofthe child.Last updated on 22 February 2013 Copyright © 2013 Rikvin Pte Ltd
  15. 15. RETIREMENTThe statutory retirement age is 62 years. However, scheme in place, it may impose high costs on theaccording to the recently-enacted Retirement and Re- employer; therefore they are allowed to renegotiateemployment Act (RRA), employers are required to make the salary & benefits part of the employment and suchan offer of re-employment to eligible employees, who adjustments must be reasonable and just.turn 62, up to the age of 65. The employees must havesatisfactory work performance and must be medically If the employer is unable to accommodate the employeefit to be eligible for this. All Singapore Citizens and on retirement to a suitable job, the employer may makePermanent Residents, unless exempted by MOM, are a one-time Employment Assistance Payment (EAP) toeligible for this re-employment provision. enable the employee to financially manage himself until he finds another job. For employees with moreRe-employment Terms than 18 months service, the EAP amount could be 3 months of salary. A minimum amount of S$4,500 andAn offer of annually renewable re-employment a maximum amount of S$10,000 could be considered.contract can be made until the employee turns 65years of age. However, employers are advised to make Employers are advised to refer to the Tripartitea three-year contract to provide a greater sense of Guidelines on Re-employment of Older Employees,certainty to the employees. to ease the re-employment process for their retiring workers.The terms of re-employment must be fair andmeasures must be taken to avoid disputes. The In case of any disputes that the employee has with theemployer must carry out re-employment process in re-employment, he may seek the union’s assistance ora congenial manner and a consultative approach with report to the Commissioner of Labor. If the employeethe employee who must present an open mind for the is not offered a re-employment contract, a report mustproposal discussed. be made within 1 month of last day of employment; and for unacceptable terms of contract of re-employmentSalary/wages can be adjusted based on the revised or non-payment or inadequacy, EAP reports must benature of duties and responsibilities, productivity etc. lodged within six months of last day of work.Where there is a seniority-based wage and benefitsLast updated on 22 February 2013 Copyright © 2013 Rikvin Pte Ltd
  16. 16. RETRENCHMENT A retrenchment exercise must be carried out The benefits are not stipulated by the Act and depend responsibly and all efforts must be taken to ensure on the mutual agreement between the employer and that the affected employees receive all payments and employee and the financial situation of the company. compensation according to the contract or as agreed Benefit payments do not attract CPF contributions. mutually by the trade union and employer. Temporary Lay-offs & Shorter work weeks Notice of Retrenchment As an alternative to retrenchment, which will Any impending retrenchment program must be made adversely affect employees, employers have the known to the affected employees prior to serving option of implementing temporary lay-offs and shorter the notice of retrenchment. The notice period of workweeks to mitigate the impact. retrenchment must meet the minimum stipulation set out by the EA as below: Shorter workweeks cannot last more than two months and the reduction cannot be more than two days in a Length of service Notice Period week. Less than 26 weeks 1 day Employees must be paid at least half of their gross 26 weeks to less than 2 years 1 week salary during the lay-off period. Companies paying half- 2 years to less than 5 years 2 weeks day salary during layoffs may allow their employees to go on half-day paid annual leave, thus the employees 5 years and above 4 weeks will get their full salary. However, employees are not allowed to consume more than 50% of their annual Retrenchment Benefits leave for this purpose. Employees who have a minimum service period of three years are entitled to benefits on retrenchment. Though employees who have less than three years of service are not entitled to benefits, the company may provide some benefits on grounds of compassion.Last updated on 22 February 2013 Copyright © 2013 Rikvin Pte Ltd
  17. 17. THE WORKRIGHT INITIATIVEWork RightIn order to protect vulnerable worker groups suchas elderly and low-waged workers from unfairtreatment and deprivation of the rights they areentitled to, the Ministry of Manpower (MOM) andCentral Provident Fund (CPF) Board have embarkedon a two-pronged strategy to ensure compliancewith the CPF Act and Employment Act (EA).The WorkRight Initiative undertaken by the twobodies employs an educational and enforcementapproach to ensure compliance with the provisionsand aims to promote prompt payment of CPFcontributions, on-time payment of salary, overtimepayment, provision of paid annual and sick leave,and adherence to working-hour requirements,among others.It also enforces heftier punishments on employerswho do not comply with said regulations andserves as a platform to educate workers to act aswhistleblowers against errant employers.Last updated on 22 February 2013 Copyright © 2013 Rikvin Pte Ltd
  18. 18. Helpful Links:Company RegistrationSingapore Work VisasBusiness ServicesAccounting ServicesOffshore CompanyRIKVIN PTE LTD20 Cecil Street, #14-01, Equity Plaza, Singapore 049705Main Line : (+65) 6320 1888Fax : (+65) 6438 2436Email : info@rikvin.comWebsite : www.rikvin.comReg No 200100602KEA License No 11C3030This material has been prepared by Rikvin for the exclusiveuse of the party to whom Rikvin delivers this material.This material is for informational purposes only and hasno regard to the specific investment objectives, financialsituation or particular needs of any specific recipient.Where the source of information is obtained from thirdparties, Rikvin is not responsible for, and does not acceptany liability over the content. Copyright © 2013 Rikvin Pte Ltd